House Bill 851 was passed during the 2014 Legislative Session and will become law on July 1, 2014. The law reduces future costs at State Universities in Florida, allowing the Florida Prepaid College Board to better predict State University tuition and fee costs covered by the Stanley G. Tate Florida Prepaid College Program. Specifically, the law reduces the maximum annual increase of the tuition differential fee to six percent for preeminent State Universities (Florida State University and University of Florida) and zero percent for all other State Universities. Prior to this, the existing law permitted the aggregate sum of tuition and the tuition differential fee to increase by up to 15 percent at all State Universities.
All State Universities charge the Tuition Differential Fee to cover certain additional costs. The tuition differential fee was approved by the 2007 Florida Legislature. In 2007, the last year before the introduction of the tuition differential fee for State Universities, the parent of a newborn could guarantee the cost of college tuition and most fees at a StateUniversity in Florida with Florida Prepaid College Plans for less than $15,000. In 2008, the newborn plan cost, including Tuition Differential Fee, rose to just over $21,000. In 2010, after the cap on the tuition differential fee as percent of tuition was removed, the newborn plan cost almost doubled to just under $41,000. In 2014, after several years of double digit increases in the tuition differential fee, the newborn plan cost was nearly $54,000. For the 2015 Contract Year, beginning this fall, the new law will allow newborn plan costs to be an anticipated $35,000 or less.
It is expected that the 4-Year Florida University Plan, 2 + 2 Florida Plan and Tuition Differential Fee Plan will be offered at the lowest price in 5 years. The lump sum price of the 4-Year Florida University Plan for a newborn is anticipated to be $35,000 or less and monthly payments are expected to be $250 or less. All plan prices will be available at the start of Open Enrollment, which is scheduled to begin October 15, 2014.
No, the legislation does not change Prepaid Plan coverage. All Prepaid Plans continue to be guaranteed by the state of Florida and cover Tuition and most Fees at a Florida College or State University.
The great news is not just for future Prepaid Plans. It is anticipated that more than 40,000 existing Prepaid Plans will see refunds and/or payment reductions because of the new law. Refunds and/or payment reductions are expected for 4-Year Florida University Plans and 2 + 2 Florida Plans purchased from Contract Year 2011 to 2014, as well as Tuition Differential Fee Plans purchased from Contract Year 2008 to 2014. The Board would like to assure all existing Account Owners that they will not have paid more for their Prepaid Plan than the reduced costs of future Prepaid Plans.
To determine your Prepaid Plan type(s) and Contract Year, you may login to your account at www.myfloridaprepaid.com/my-account. After you select a Beneficiary on the main screen, the Plan Type and Contract Year of your Prepaid Plan is available under Plan Summary Information.
Yes, you should continue to make your payments. If eligible, you will be notified of your refund and/or payment reduction.
Eligible Account Owners can expect to receive notification from the Board in September regarding their specific refund and/or payment reduction information. It is anticipated that payment reductions will be applied to Prepaid Plan payments beginning September 20, 2014 and refund checks will be processed and mailed within 4-6 weeks of that date. No action from Account Owners is necessary at this time.